Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316876 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11762
Publisher: 
CESifo GmbH, Munich
Abstract: 
To support the green transition in the automotive sector, the EU has introduced CO2 emission performance standards, also known as the excess emissions premium (EEP) regulation, which will tighten until 2035. Manufacturers exceeding their average fleet emission targets must pay a penalty. The regulation also allows pooling of fleets, enabling manufacturers to combine fleets. We analyze how this affects market outcomes. The EEP creates a positive externality of electric on conventional cars. Pooling eases compliance but may weaken competition among existing market players, while simultaneously encouraging the entry of electric-only manufacturers into the EU.
Subjects: 
green regulation
automotive industry
excess emissions premium
JEL: 
D04
L11
L50
Document Type: 
Working Paper
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